Blue Apron Holdings, Inc. [NYSE: APRN] was one of the big gainers on Tuesday trading. The stock shot up by 60%, before a pullback saw it close the day with gains of 35.51%. This massive increase in value was driven by the company’s partnership with Beyond Meat, Inc. [NASDAQ: BYND]. Through this partnership, Blue Apron will offer Beyond Meat’s plant-based proteins in its meal plans. Given how popular Beyond meat products have become, the expectation is that they could help boost Blue Apron’s declining sales. The company has been struggling due to increased competition and declining consumer interest in its meals.
In fact, even after the Beyond Meat deal, analysts are skeptical of its possible impact on the company’s revenues and stock price. For instance, after the deal was announced, Bloomberg ran a story with the title, “Beyond Meat Can’t Save Blue Apron”. The Wall Street Journal also ran a similar story with the title, Blue Apron’s Beyond Meat Deal Lacks Substance.” Bloomberg’s article focused on the company’s business model, and how it doesn’t fit with consumer lifestyles. On its part, The Wall Street Journal focused on how analysts have lowered this stock’s rating.
From a look at the charts, APRN is in a retracement phase at the moment. After the Beyond Meat deal pushed it to a high of $13.57, it started receding and closed the day at $10.38. If in the day, bears push the stock below $9.45, which is a key support level on the 50-day MA, it would be an indicator to more declines in the day. This could see Blue Apron test new lows in the short-term. However, if bulls APRN pushes past Tuesday’s close of $10.38 and more importantly a high of $13.60, it would be an indicator that bulls are in control, and could see this stock trade in the green on Wednesday. In the short-term, trading volumes are likely to be the key determinant to this stock’s price action.